FRANKFURT (Reuters) – SAP shares rose 4.4% in premarket trading at Lang & Schwartz on Tuesday after the German software company raised its full-year target for its strong cloud business in the third quarter.
Third-quarter cloud revenue increased 27% to €4.35 billion ($4.71 billion), adjusted for currency effects. This was driven by a 36% increase in revenue from the Cloud ERP Suite resource planning program.
According to CEO Christian Klein, artificial intelligence was a key growth driver. “About 30% of cloud contracts in the third quarter included AI usage scenarios,” he said late Monday.
Operating profit rose 28% to 2.24 billion euros, beating expectations, thanks to cost-cutting measures and relatively few new jobs, Chief Financial Officer Dominic Assam said.
The company expects ongoing restructuring costs to be around €3 billion as it evaluates up to 10,000 of its roughly 100,000 jobs to prepare for the emerging era of AI.
On this basis, the Walldorf-based group raised its full-year cloud and software revenue target to 29.5-29.8 billion euros instead of 29.0-29.5 billion euros.
Operating profit in 2024 is now expected to be 7.8 billion euros, up from the previous forecast of 7.6 billion to 7.9 billion euros.
(1 dollar = 0.9243 euro)
(Reporting by Hakan Ersan, Text by Miranda Murray)
